FMCG,white goods makers pin hopes on 2018 to erase past woes
New Delhi:Recovering from the double impact of demonetisation and goods and services tax (GST) implementation, fast moving consumer goods (FMCG) companies and consumer durable firms are pinning hopes on 2018 that improved market sentiment will bring them back to the growth path.
With the streamlining of the process after GST implementation behind them, the companies feel that the prospects of good economic growth, coupled with a revival in demand and consumption, will help them overcome the hit they took in volumes and profits in 2017. Interestingly, these firms believe that the demand should be evenly distributed between urban and rural markets.
“With the market sentiment showing signs of improvement and stability returning post-GST implementation, we expect the demand scenario to move up, both in rural and urban markets,” Dabur India chief financial officer (CFO) Lalit Malik told PTI. Expressing similar views, Emami Ltd director Harsha Vardhan Agarwal said retail and rural businesses have bounced back fully and are growing in healthy double digits while wholesale channel is yet to recover fully at about 80% of the base.
“We believe that economic reforms like GST and demonetisation would help drive economic growth in a structured way in the long term and we expect further improvement in our performance in coming quarters,” he said. Sony India head of sales Satish Padmanabhan also said the industry is already seeing “positive comeback signs post the implementation of GST and expects 2018 to only be better”.
Recollecting challenges faced in 2017, Godrej Consumer Products Limited business head (India and SAARC) Sunil Kataria said, “Demonetisation was a black swan event for the Indian economy. Among many challenges, the biggest disruption was caused in the distribution network for FMCG companies.”
Dabur India CFO Lalit Malik said: “In the short term, both demonetisation and GST impacted wholesale trade because of issues related to execution and led to a massive amount of destocking across the trade channel.”
“2017 was an eventful year for the broader Indian economy, our industry and our business. We went through some ups and downs given the two major reforms of demonetisation and GST during the year,” Whirlpool India managing director Sunil D’Souza said.
With the hurdles now history, the companies, especially electronic goods and appliances makers, are gearing up to bring innovative products to woo consumers to showrooms in 2018. “In 2018, we will continue to bring industry first innovations for Indian consumers with an exciting line-up of future-ready products,” said Rajeev Bhutani, Samsung India vice president, consumer electronics business.
Samsung will kickstart 2018 with the world’s first innovation in the AC segment that would take the consumer convenience and comfort to the next level, he claimed. Likewise, Padmanabhan said Sony India will continue to roll out “technologically advanced products across categories in future and keep our customers engaged with Sony products”.
Panasonic India is also not lagging in its plans for new products with a major transition in portfolio and positioning in the offing. “We will strengthen as a comprehensive consumer electronics maker to offer solutions that fulfils the wishes of customers while improving our individual products,” said Manish Sharma, Panasonic India and South Asia president and CEO.
When contacted, a spokesperson for LG India said, “Product leadership is the key and we will continue bringing newer technologies based on Indian consumer insights.” With the government pushing for domestic manufacturing, Sharma, who is also president of Consumer Electronics and Appliances Manufacturers Association (CEAMA), said the industry expects ratio of local manufacturing to increase, going forward.
“The industry acknowledges the pro-industry reforms undertaken by the government and is looking forward to the Phased Manufacturing Programme (PMP) policy in 2018, which in turn will boost indigenous manufacturing,” he added. PTI